Economic slowdown hits real estate

/by Arabian Post Staff/The impact of the softening global economy continues to hamper the UAE’s office market as redundancies in the oil and gas, finance and banking sectors have stifled demand for office space across the emirates, according to leading international real estate consultancy Cluttons. Cluttons’ 2016 UAE Property Market Report, highlights the consultancy’s expectation for office market performance throughout the year and expects declines of close to 5% in Abu Dhabi and Dubai, while Sharjah will witness declines of closer to 10% by the end of the year. Faisal Durrani, head of research at Cluttons said: “Global economic headwinds in the form of the Chinese slowdown, the era of USD 40 per barrel oil, the ongoing sovereign debt issues in the EU and the global fall out now playing out as a result of Britain’s decision to leave the EU are amongst the most significant growth dampeners for the UAE. “Despite the relatively diversified economy across the emirates, the non-oil economy is being subjected to a deterioration in sentiment and overall confidence; vital ingredients for sustaining positive growth. This is undermining rents and capital values, which are, for the most part, weakening across the board as the office market across the UAE waits in anticipation to feel the Expo effect. We believe this will begin to kick in next year as activity ramps up for the mega event.” The impact of the softening global economy continues to hamper the UAE’s office market as redundancies in the oil and gas, finance and banking sectors have stifled demand for office space across the emirates, according to leading international real estate consultancy Cluttons. Cluttons’ 2016 UAE Property Market Report, highlights the consultancy’s expectation for office market performance throughout the year and expects declines of close to 5% in Abu Dhabi and Dubai, while Sharjah will witness declines of closer to 10% by the end of the year.0 Faisal Durrani, head of research at Cluttons said: “Global economic headwinds in the form of the Chinese slowdown, the era of USD 40 per barrel oil, the ongoing sovereign debt issues in the EU and the global fall out now playing out as a result of Britain’s decision to leave the EU are amongst the most significant growth dampeners for the UAE.

“Despite the relatively diversified economy across the emirates, the non-oil economy is being subjected to a deterioration in sentiment and overall confidence; vital ingredients for sustaining positive growth. This is undermining rents and capital values, which are, for the most part, weakening across the board as the office market across the UAE waits in anticipation to feel the Expo effect. We believe this will begin to kick in next year as activity ramps up for the mega event.”

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